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Up and above anything else, all praise to Almighty Allah alone, theOmnipresent and the most Merciful and compassionate. The words arebound, knowledge is limited and time is short to express His dignity. It isone of infinite blessings of Allah that he bestowed me with the potentialand ability to contribution towards the deep oceans of knowledge already
existing.
I pay hum-age to greatest personality of the universe; HOLY PROPHETHAZARAT MUHAMMAD (PBUH) who is forever source and spring ofguidance in every sphere of life.
At the very outset, I would like to express my hearties and sincerest senseof gratitude to all my worthy teachers of CIIT Lahore for their inspiringguidance and constructive criticism.
I am highly thankful for the cooperation ofMr. Bilal Niazi, Mr. Wasim
Omer, Mr. Rizwan Malik, Mr. Tahir Mehmood, Mr. Nouman Chathaand Mr. Kashif Niazi of Colony Industries (Pvt.) Ltd. I might not beable to complete my internship without their cooperation and kindbehavior. I am also gratified to all my sincere fellows who I had everremembered for their continued encouragement moral support andinvaluable succor as well as substantial cooperation during my criticalmoments.
Hassan Bakhtiar Roy
Contents
Executive Summary 5
Textile Industry in Pakistan 6
Introduction & History 8
Vision Statement 10
Mission Statement 10
Group Management Profile 10
Production Accounting & Management System 12
Inspection System 13
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Organizational Structure 15
SWOT Analysis 18
Detail of SWOT Analysis 20
PEST Analysis 25
Marketing Strategy 26
Competitive Strategy 30
Purchase Accounting System 31
Process of Yarn Production 34
Work done during Internship 36
Learning as an Internee 41
Recommendations 43
Annexure 44
Glossary 50
Bibliography 52
Executive Summary
This report is based on the activities performed during the internship atCOLONY Textile Mills Limited. Internship duration was 6 weeks and itprovided practical knowledge of working in professional environment.
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This learning experience is described in detail n the various sections ofthis report.
In the first section, there is some detail about the company. The historyand present status of the company is explained. The organization structure
and the details of its management along with its location are alsodiscussed. I have also discussed the yarn manufacturing procedure and theimportant departments of the company. I have discussed some businessoperations and some strategies as well.
The second section provides information about the activities that Iperformed during the internship. I worked as an internee mainly inAccounts and Marketing department. However, I also spent some time inPurchase Department to gather some information about their working.
The third and last section includes the recommendations.
Textile Industry in Pakistan
The subcontinent is the inheritor of one of the richest and oldest textiletraditions in the world. Excavations at Mohenjo Daro and Harappa 2500-1500 BC revealed that the inhabitants of the Indus Valley cultivatedcotton. Sir John Marshall, the archaeologist has stated that a few minutescraps of cotton were found adhering to the side of a silver vase. Clay andfaience spindles whorls indicate that cotton and woolen fibers were spun.A well-equipped dyers workshop was excavated at Mohenjo Daro and thefragment of cloth indicates that woven cotton cloth was dyed with madder
root.
Independence from the British in 1947 and the division of the Indiansubcontinent into Pakistan and India started a new era for textilesproduction. Pakistan consisted of two entities, east and West Pakistan. TheWest was the cotton producing area and the East was responsible for juteproduction. At the time of partition, Pakistan had no industrial base andinherited only one textile mill, the Lyallpur Cotton Mill in Lyallpur [now
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called Faisalabad]. This mill produced yarn and gray cloth and no printedfabrics.
Under the Open General Licensing [OGL] scheme, the businesscommunity imported plants and machinery with cash dollars. In 1950,
Adamjee Mills was set up in Karachi, Kohinoor in Faisalabad, ColonyTextile Mills in Multan, Nishat and Crescent Textile in Faisalabad. Thesewere followed by Gul Ahmed Textile Mills, Al-Karam, Valika, Star andRashid textile mills.
Within a decade the new country of Pakistan was self-sufficient in cottonand began exporting gray cloth and later cotton yarn. Pakistan startedexporting printed fabrics in the late 1970s to Africa and by mid 80s was
sending printed material to Europe. Pakistans location was ideal, as it layhalfway between the western world and the Far East. Pakistan has a 28percent share in world export of cotton yarn and a 6 percent share in world
export of cotton cloth.
It was in the 60s that the power loom took over and by the 70s gray clothwas being exported at throwaway prices. There are about 200,000 powerlooms operating in Pakistan some of which are backyard operations.Handloom, which formed the backbone of textile goods in the last century,is now almost non-existent, its sales confined to a fast diminishing ruralmarket and a very small niche market.
Although Pakistan is the worlds fourth largest cotton growing nation in
the world, after the United States, China, and India, its total turnover for
export is only $ 5 billion. Textile goods form 60 % of the total exports ofthe country. The commodities exported are yarn, cloth, tents, and canvas,bags, towels, bed linen, garments, synthetic textiles and other made ups.
With a large and expanding textile industry, textile education and trainingbecame imperative. The Textile University of Pakistan was established inKarachi to train technical and management professionals. The TextileUniversity awards degrees in Textile Sciences and Textile Management.The National College of Arts in Lahore and the Indus Valley School ofArt and Architecture in Karachi are the only two institutions in Pakistan,which award a degree in the discipline of Textile Design. Designers arebeing absorbed into the industry, bringing about change and vibrancy,with innovations in Print design and weaving.
Today there are 450 Spinning mills and 35 composite textile mills. Textilegoods form 60 % of the total exports of Pakistan.
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Introduction &
History
Colony group has been the pioneer of textile industry by setting up Colony
Textile Mills Limited (CTML) after partition of the sub continent in 1950,thus CTML became one of the first textile mills to be registered as publiclimited company and quoted in Karachi Stock Exchange (KSE).
Foundation of the group was kept over a small flour milling operation,which rapidly grew into cotton ginning that evolved into the core businessof the group, constituting 21 cotton ginners spread throughout the cottongrown belt in the province of Punjab - Pakistan. The logical verticalprocess-integration paved its path for the group to invest in to TextileSpinning. The ground breaking of the Spinning facility was the beginningof huge investments that followed which gave the group a leading position
in the Textile Industry of the Country.
Colony Textile soon became one of the largest vertically integrated textilefacilities in the country. The group further diversified in to PowerGeneration and Distribution network, Banking, Insurance, and Cementsectors. The success of the group continued until the government regimeshift brought about a shift in policy from private sector pushedindustrialization to a strong wave of nationalization. The Ginning, FlourMilling, Power, Banking, Insurance and Cement along with various othersectors were completely taken over by the government.
Having major assets nationalized, the Group was faced with severefinancial difficulties for almost one and a half decades.
Presently, the Colony Group consists of several Textile Spinning facilitieswith an installed capacity in excess of 220,000 spindles out of which morethan 200,000 spindles are 4 years old or less.
Colony group is managing the following companies:
Company Name Line of Business Status
Colony Textile Mills Limited Textile (Spinning) Public Limited Company
Colony Industries (Pvt.) Limited Textile (Spinning & Weaving) Private Limited Company
Colony Textile Mills Limited (CTML)
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Colony Textile Mills Limited, one of the group companies of the ColonyGroup, is a Textile Manufacturing unit established as on 24th August, 1946 andengaged in manufacturing of yarns of various Ne Counts. The company has authorized capital of Rs.
411,000,000 as on September 30th 2008.
During year 2000 to 2001 the annual production capacity of the company was 34.813 million Kgs converted
into 20 Ne Count based on 111,136 spindles. Currently the number of spindles installed has been increased to
over 175,000 spindles.
A summary of the companys production record for spinning section for the past three years is given in Annex
1.5
Year ended 30th September 2006 2007 2008
o. o s p n es nsta e , , ,
verage no. o spn es wor e
,
,
,
Capacity at 20 count(Kgs.) 17,778,000 22,841,002 48,669,115
No. of shifts worked 1,092 1,040 1,095
Actual production converted at 20 count 14,652,680 18,703,378 47,394,446
Capacity Utilization 82.00% 82.00% 97.38%
The company sales are comprised of local sales which is almost 100% against advance cash payment. The total
turnover of the company during last year was Rs. 3.226 Billion which is expected to cross 5.00 Billion mark
during the current year.
Vision Statement
Attain highest standards of quality in its all business activities.
Sustained growth in real terms.
Have professionally trained high quality motivated workforce, working as a team in all environments.
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Attain past glorious position and be recognized locally as well as internationally as a dynamic, quality
conscious and progressive company and industry leader.
Mission Statement
To manufacture quality products for customer satisfaction through
Honoring the commitment.
Continuous endeavor for improvement through adoption of most modern technology in production.
Strict adherence to quality control.
Developing a sense of high reliability through fair dealing.
Becoming a part of countrys development and economic prosperity.
Group Management Profile
A brief profile of the main directors of the company which hold majority of the shareholding is given below:
MR. MUGHIS A. SHEIKH
Mr. Mughis A. Sheikh is the Chairman of Colony Textile Mills Limited.
MR. FAREED M. SHEIKH
Mr. Fareed M. Sheikh is the Chief Executive of Colony Textile Mills Limited.
MR. NAVEED M. SHEIKH
Mr. Naveed M. Sheikh is CEO and director of Colony Weaving Mills (Pvt.) Limited.
Production Accounting & Management System
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CIL production accounting and management system not only ensures consistency in the operations but also
helps to manage orders on a micro level. In-house developed software provides great tools to CIL production
team for monitoring production processes, production planning, and conducting periodic audits to reduce
possible delays and coordination snags along with achieving a greater degree of reliable inter-departmental
information exchange.
Production Capacity & Capability
With the installed capacity of 120 looms, the plant can produce more than 1,500,000 Linear Meters per month,
with a wide variety of fabrics; from percales to satins, from twills to drills, from rip stops to high thread count
fabrics, stretch fabric and much more.
All looms have a high speed connectivity facility through Local Area Network along with being Web-enabled.
CIL customers will be able to monitor looms allocated to their contracts, and also view what articles are being
run on what looms and at what efficiency, whereby correlating the delivery snags, if any, on one hand and
quality related issues on the other. For this organization customer confidence is the key to success, and
providing this transparency to their customers can facilitate the business on the commercial side as well as
providing CIL production team to strive for either improving their performance or marinating the quality which
is for the satisfaction of the clients.
Inspection System
Colony Industries (Pvt.) Limited is the pioneer in the entire Indo-Pak region in deploying the Uster FabriScan in
its facility. The FabriScan replaces the traditional manual inspection by a far more consistent and objective data
collection. This system is capable of inspecting Fabric production of a 240 loom facility. Deploying this
machine in this facility was a well thought-out decision as this system is not subject to fatigue, downtimes, or
outside influences. It provides consistent checking the entire quantity of fabric fed through it. There is no
negligence factor, no favors to be made, no rules to be compromised besides providing a big pool of
information that is humanly not possible. All faults are UV tagged so that mending operation can be
performed (if necessary) at the exact location of the fault.
The machine can be programmed to inspect as per the requirements of the customer and those criterion saved
for future reference and use. The inspection reports can be made available to client on the web so that pre-
screening of their consignment can be done timely, effectively and in -synchronization with their production
plan. In order to cater for our direct Dye-House customers, we have the CUT OPTIMIZATION option
available. As soon as the inspection is complete, the system performs the optimization process and suggests the
best possible way to cut the fabric to get the highest number of pieces of the Optimal Quality.
Power Generation & Heat Recovery System
Colony Weaving Mills is fully-contained and self-sufficient facility with its in-house continuous and reliable
power generation facility with 100% backup power arrangement. The Power Generation department with its
Heat Recover System is designed to generate enough hot water to fire the chilling system for the entire facility,
along with producing more than 50% of the steam required for the sizing operation.
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Memberships
Lahore Chamber of Commerce Industries
APTMA (All PAKISTAN TEXTILE MILLS ASSOCIATION).
Products
Yarn
The company is producing 100% cotton yarn, 100% Polyester yarn, 100% Viscose yarn and mixed yarn of
various counts ranging from coarser Number English 20 count to finer Number English 80 count.
Fabric
CIL is producing Grey Fabric with following fiber types, for abbreviations detail see Glossary:
Organizational Structure
The concept of an organization chart shows what positions exist, how they are grouped and who reports to
whom.
The organizational structure should be designed to provide both vertical and horizontal information flow as
necessary to accomplish the organizational overall goals. If the structure doesnt fit the information
requirements of the organization, people will have either too little information or will spent time on processing
information that is not vital to their tasks, thus reducing effectiveness.
Colony Groups structure is a hybrid of divisional and functional structures; divisions are based on two products
Yarn (Spinning Facility) and Grey Fabric (Weaving Facili ty).
Top positions are as follows:
See Annexure 1.1
Group Profile
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Board of Directors
Mr. Mughis A. Sheikh (Chairman)
Mr. Fareed M. Sheikh (Chief Executive Officer)
Mr. Zarrar Ibn-e-Zahoor
Mr. M. Akram Qureshi
Mr. Najeeb Ahmed
Mr. Muhammad Shakeel
Mr. Tahir Mahmood
Registered Office
M. Ismail Aiwan-e-Science
Shahrah-i-Jalaluddin Roomi,
Ferozepur Road Lahore54600
Phone: (042) 57589702
Fax: (042) 5763247
Colony Industries (Pvt.) Limited
CIL consists of two divisions Weaving & Spinning; following is the top positions in CIL.
See Annexure 1.2
Accounts Department
Accounts Department keeps track of all transactions. Each and every sales confirmation note and purchase
confirmation notes come to Accounts Department for making timely payments and recovery of money from
buyers.
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Internal auditing is also another responsibility of Accounts Department for smooth and clear handling of
operations.
See Annex 1.3
SWOT Analysis
Strengths:
ISO 9001-2000:
Strong Security System
High quality product
Latest mechanized
machinery.
Tremendous market
positioning
Highly qualified and skilled
management
Highly Motivated
Workforce
Adequate financial
resources
Competitive advantage
Weaknesses:
High cost of production
Centralized decision making
Less promotional activities
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wn power generat on p ant
Opportunity:
Organization Can expand
product lines
Organization Can capture
new market segments around the
world
Organization Can reduce the
cost by proper utilization of
resources
Organization Can hire more
well-educated and experienced
person
Threats:
New Entry of competitors
Buyer needs demands
changes
Political instability
Change of government
policies
Globally Economic
instability
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Detail of SWOT Analysis
Strengths:
ISO 9001-2000:
CTML is certified under ISO 9001-2000 and so it meets the requirement of international standard and has a
value in the mind of concern people.
Strong Security System
CTML has a greater security system. There are different hidden security cameras which capture all the
moments.
High quality product
CTML is using advance technology like they have modern machinery by which the quality of product produced
is very high.
Latest mechanized machinery.
They are using modern looms which they have purchased from Japan, Germany and France. And by using that
latest machinery the productivity of the employees are very high.
Tremendous market positioning
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CTML is one of the Pioneer Textile Group in the Pakistan so it has got the position in the mind of its customer.
And being an old textile company people are loyal with it. CTML has a better position in the mind of its
customers.
Highly qualified and skilled management
The management of CTML is skilled they have hired the foreign graduate people in their management and also
experienced people from all over the country.
Highly Motivated Workforce
They are providing better pay to their employees and also bonus to them which motivate the workforce and they
are doing well at work setting. Apart from that they are giving their employees facilities of Convenience like
personal car along with fuel provided by the company too, which is a big deal for motivating the employees.
Adequate financial resources
The owners of CTML are one of the richest persons of the Pakistan and they have more plant and investment in
other industries like Sugar Mills, and Share Market. They have adequate financial resources to meet their
requirements.
Competitive advantage
Because it is an old textile originating from 1950s and it has still kept its position in the textile market on all
competitors nationwide, which is its competitive advantage.
Own Power Generation Plant
They have own power generation plant and CTML is the pioneer in the private organization who start the power
generation.
Weaknesses:
High cost of production
The production cost is high because of un-proper utilization of resources.
Centralized decision making
The decisions are made by the upper management which is weakness of the CTML because they have not any
proper idea about the prevailing situation and their decision can be un-fruitful for the company.
Less promotional activities
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The advertising and promotional cost of the CTML is very low it can take advantage for more turn outs.
Opportunity:
Organization can expand Product Lines
Currently the CTML is not dealing in knitwear they can expand their product line by producing knitwear. They
have plants and the extra cost for the production will be low for CTML. They also have better market repute.
Organization can reduce the cost by proper utilization of resources
If the cost of different matters which are not been utilized properly, is controlled by the CTML management
they can produce more at less costs. It has to develop a further systematic process for controlling and managing
resources.
Organization can hire more well-educated and experienced person
They can take advantages by hiring more skilled people and they should hire young, fresh and energetic staff
for their betterment. Because being human, you always have the room for betterment in any aspect.
Threats:
Buyer needs demands changes
Because of the research & development the design and the product of CTML is just satisfactory as compared to
competitors in the global environment and they are not fulfilling the demand of customers.
Political instability
Political instability effects the CTML because of the quota system, Government can restrict the Company to
export.
Changed of government policies
Government policies are changing day by day so it is always a threat for not only CTML but for any company
to survive in such a environment.
Globally Economic instability
Because of the economic instability the CTML and the Dumping system which is rising on daily basis in the
world can create many problems for the company and any uncertainty in the world like 9/11 may also affect its
overall exports.
PEST Analysis
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Political Instability
The political situation of Pakistan is not satisfactory. Due to the rapid change in the Government every
government sets its own new trade policies.
Govt. should apply sustainable policies for the beneficial of the exporters as well as the investors.
Economic situation:
The economic condition of Pakistan can also affect the foreign investors increasing inflation rate make the cost
of production high and thus reduce the profit margin of the investor.
Social situation:
The change in the lifestyle of the people affects the growing demand of the CTML products. The change in the
lifestyle and needs in different demographics also affect the demand of the customers.
Technological factor:
Technological advancement in all the sectors of the country has changed the entire socio-economic
environment. Especially in the textile sector there is a lot of technological development.
CTMLs excellent computerized machines and devices have made extension in its present setup of well
advanced technology imported from Japan, Germany and France.
MARKETING STRATEGY
CTML is a group starting from 1950s which means that it is an old and pioneers of Textile industry in
Pakistan. On its purchase side as I have worked for a whole week in Yarn Procurement department of the
Group, which is a small branch of Marketing department. I found their business to be such a vast that they
ordered their raw material on telephones, they made contracts with the new companies and those companies
having already contracts had no need to made. The main which were daily paid were mainly to the ICI for
polyester and then to companies like Nishat, Sitara Textiles and many more companies and groups like that.
Their fiber is very famous not only nationally but internationally as well.
Secondly on Europe sector this group is very well known as they purchase machinery from them and then they
supply Methane to them, which is used in mixing with petrol. Though it is a by-product of sugar sector yet it isbranch of the same company. This is helpful for the Textile division too.
The past year has been tough for the textile industry as competition is increasing steadily and margin of profit is
becoming smaller day-by-day. Our competitors from Asia have come up in a big way with lower prices
resulting from lower overhead, cheaper and better raw materials and machinery.
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Countries like China, Indonesia, India and Bangladesh played an active role in the fabric market. Improvement
in quality and production capability was the main area of concentration.
Market for Yarns and Grey fabrics was diversified to increase the customer base and reduce dependency on the
Far East. In this effort business with Malaysia, Korea, Taiwan, UK and South America was initiated in case of
Yarns.
In case of Grey Fabric market business was initiated in South Africa, North America, Japan, Italy, France, and
Sri Lanka etc. Product range was also increased to cater to the differing needs of the buyers. Fancy and special
items like Dobby Designs, Bedford Cords, and Caviar Twills and stretch fabrics were developed which are
being sold at premium prices.
CTML has constantly updated our machinery, replacing old machines with new ones upgrading the existing set-
up, leading to better efficiencies and quality products.
Leaving behind the traditional way of doing business and in our journey towards excellent it has consistently
expanded its buyer base and explored the different markets around the world.
Keeping in view demand of the World market, CTML pursued its strategy of value addition and reducing the
dependency on Grey Fabrics and Grey Yarn.
Having the foresight to assess that in coming years value addition will be the thing of the future, CTML
worked towards the achievement of its goal of future increasing its capability in value addition.
The export of processed fabric and made-Ups has shown market improvement as compared to last year.
It has placed us successfully in the middle to upper end of the market. Our strength in Europe is the curtain
division.
This included yarn dyed dobbies, engineered confections, different finishes and embellished products. The plan
is to continue with this winning strategy and at the same time we are trying to find new clients in the high end.
We are also exploring business opportunities in countries like Spain and France where CTML has very little
business at the moment.
North America is the star market for CTML; its a new market for it after breaking up the exclusive
arrangement with our previous sale set-up. The quota is coming down in 2005 and we have started to prepare
for it internally as well as for the external environment. Bedding is the bulk of the home textile business.
CTML is in the process of updating its machinery to cater the needs of the wider width fabric requirement for
USA bedding business. CTML is also taking up the social accountability issues very seriously, which are so
dear to the American consumers. A lot of big brand US companies have visited us and are discussing the
possibilities of a joint venture.
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The opportunities are limitless, we have to review and analyze them very thoroughly to associate with the right
people in the long run. In shorter term we are building a small amount of quota, which will give us recognition
as a bedding supplier.
CTML is very strong in non-quota categories like curtain and table linen. These categories are best served with
new product development (NPD). CTML will coordinate the effort for NPD by all markets to optimize results.
CTML has achieved the highest sales in 1999-2002 for North America market.
On top CTML has developed more direct and closer relationship with its end customers. Oceanic has been our
most lucrative and mature marker. In business terms it is our cash cow market.
Primarily due to being a non-quota market it had no real limitations in this market. Despite economic problems
in that region, it has maintained our sales figures in the year under review. This market is a good design source
for other markets, which is helping us to maintain our print volumes.
Middle East market is composed of South Africa and the new emerging markets like the UAE, Egypt, Saudi
Arabia, and Jordan etc. CTML has dedicated new staff with fresh energy for the emerging market.
They have successfully broken the ground and we have very strong fai th that these markets will give us good
volumes in the near future. We are also targeting printed apparel business for the first time. The latest addition
is the most ambitious Apparel Dyeing plant setup in Raiwind Mill, which has started its production.
The effectiveness and productivity of this plant will be further enhanced, as CTML moves towards becoming a
more vertically integrated organization.
CTML has increasing its profitability by working efficiently, procuring better raw material and most
importantly kept a very close association with its customers.
It visits its business partners frequently and provides them with the best service possible. All of the above
mentioned points led to strengthened relationship with its business partners making it very difficult for its
competition to penetrate into its market share.
CTML has provided its staff with better working environment and facilities, which enhances its efficiency and
output.
At CTML, it is prospering due to its professional commitment towards excellence and giving the best results at
all times and against all odds. Its marketing and production team co-ordinates all the time and its focus remains
on maintaining its position as the market leader in the textile sector of Pakistan.
Competitive Strategy
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As for as COLONY Group is concerned its own name is its competitive advantage. Being an old group it has its
own name in the field of Textile as well as sugar. As I have told in the above segment that it has business of
Methane gas in Europe it is its competitive advantage. As dealing in one different side gives you edge over
competitors in other field.
Furthermore, its financial assets are also an edge for the group. As being late in paying any party makes future
problems which result in delivery of any product to be late and resulting in bad image of the company.
COLONY group buys raw material from all the groups like Nishat, Sitara Textiles, Kohinoor Textiles and many
more companies like that I cannot name all of them as it is a huge number. Which automatically makes links
better and which tells its mostly products are exported. And for sure they are of finest quality.
Its one competitor is the Rupali group.
PURCHASE ACCOUNTING SYSTEM
For abbreviations see Glossary:
Purchase Procedure for Mill
When a Floor Shop in-charge (Foreman on the maintenance and Head Jobber on the Production side) needs to
purchase one or more items to facilitate his sphere of work, he will fill out a PDN. A copy of PDN used in ourcompany appears in Appendix 999. The PDN has three leafs. First copy is for the Purchase Department, second
for the Store at Mill, and third for the Department originating the demand. A good quality Carbon Paper should
be used so that even the last copy is legible.
At the initial stage there are six columns that are filled by the authorized staff of the concerned
Department/Section. Those six columns being Department, Sr. #, Item Code, Description, UOM, and Quantity
Demanded.
The company is divided in to five Consumption Departments. This division is done in order to simplify
identification of consumption patterns, allocation and analysis of wages & salaries, and convenience in
Budgeting. The Departments namely are:
Sr. # Departments Code
1) Head Office 01-00
2) Administration 02-00
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3) Spinning 03-00
4) Services 04-00
5) Residential Colony 05-00
The Department/Section code format adopted by our company is 99-99.
99-99
Department Section
Main Departments always have 00 in place of section designator. For example, 02-02 signifies that the
Department is Administration and the Section is Time Office. However, when we want to refer to the
Administration Department the code used will be 02-00, meaning that the code relates to a Main Department.
A Store Item Code List (SICL) sorted on Item Code as well as Description also containing the Unit of Measure
(UOM) of each item in front of the Description is supplied to the Store In-charge, Manager (P&A), Electric
Engineer, Mills Manager at the Mill, and Purchase Officer at the HOL. New Items added to Store Inventory (SI)
from time to time will be added manually to the list by those who have been issued the SICL. At the beginning
of every Quarter a new SICL be issued to all concerned.
PDN No.: This is a sequentially controlled five digit distinct number allocated to each PDN document.
Starting with 00001 to the first PDN of the financial year up to 99999 during that financial year.PDN numbers
is controlled by the Store In charge in the PDN Number Control Register. If HOL issues a PDN, the Purchase
Officer will ask the Store In charge to allocate his demand a PDN Number. Next number in sequence will be
allocated which will be written on the PDN by the Purchase Officer. The Store In charge will make a note of
this that the PDN was made by the HOL staff.
Department: The Section that makes the PDN fills-in i ts complete code. IfRing Maintenance is filling the
form, it will enter the code 03-10 signifying that Sub-Section Ring Maintenance of Spinning Department is
demanding what is endorsed in the PDN. The Sub-Sections description will be written in front of the blank
space provided for description. The Main Departments name will not be mentioned in this space.
Sr. No.: The first column to be filled in a PDN will be Serial Number that appears in an abbreviated form (Sr.
No.). Under this head, a whole-number in a sequential order will be filled-in for keeping a count of item
demanded in a particular PDN. It will always start from 1 and go up to a maximum of 9, as there is a provision
of only 9 rows in a PDN for entry of items.
Item Code: For various reasons including statistical analysis and MIS the Item Code has been broken into three
numeric parts, each part separated by a dash -.
The Item Code adopted in our organization is in the format 99 -99-999. Store Code combines with the Item
Code to form the ITEM CODE.
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99-99-999
Store Section Item Number
Store Sub-Section
PROCESS OF YARN PRODUCTON
See figure in Annexure 1.3
Production manager services the daily production schedules and try to work according to the demand to
schedule. There are many steps involved in production of the yarn.
BLOW ROOM
The first step is that the raw cotton is sent to Blow room for the quality of the cotton. Then it is sent to the Lab
for quality check. Here basic quality and other contents are checked in proper form. If one kg cotton is put into
this room only 600 grams cotton goes into further production process and rest goes in wastes. Here following
are wastes excluded,
B/R Gutter
Dropping
CARDING
In this step the cotton is carded. The production manager checks the cotton and it comes in the drums type
containers. These drums rotate and cotton comes out in specific form called as pones. Here about 5% cotton
goes in the shape of waste. Waste extracts from this process are called by;
Card fly
COMBING
In this step the cotton goes for combing. Combing is a process to comb and wax the cotton for softness purpose.Following wastes are excluded from cotton in this process;
Short Fiber
Comber Noel
SIMPLEX
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After the attaining of Cotton from Card and Comb processes, which is also weak this is further passed back to
blow room process called Roving and then cotton is sent to Ring process.
RING
In this step small pones are developed for further process and wastes are made out named;
Phnemaphil
AUTOCONING
In this step the manager in specific intervals checks the quality of carded pones from which yarn is produced in
shape of cones by passing through machines for this purpose. Here also some wastes are extract called;
Oily hard waste
Hard waste
PACKING
Cones manufactured in proceeding step are now kept in moisturize room for absorbing required moisture.
Cones are packed into bags or cartoon according to customer requirements.
PURCHASE DEPARTMENT
The purchase department makes all purchases. Every demand from different departments for different items is
forwarded to store and from here it is forwarded to purchase department if needed to purchase. It has a main
store in factory.
WORK DONE DURING INTERNSHIP
During my internship, I worked in the following departments.
Accounts
Marketing
Account department
In account department, I managed to understand the flow of transaction, preparation of vouchers and ledger
posting.
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Preparation of vouchers
In account department under the supervision of concerned officers, I came to know different type of vouchers
being prepared and their process of preparation. Vouchers are written evidence of any business transaction. The
different type of vouchers being prepared by the account department of CTML is as under,
Cash payment vouchers
Cash receipts vouchers
Journal voucher or adjustment vouchers
Now I will discuss these vouchers one by one:
Cash Payment Vouchers
Being a public limited company cash payment vouchers are used for recording the expense of less than five
thousand. These types of vouchers are prepared when cash payments are made against small expenses i.e.
repair, entertainment etc. in order to record the expenses following entry is passed:
Account code name of expense (debit) Amount
Cash account (credit) Amount
Evidence of expense is attached with the cash payment vouchers.
Cash Receipt Vouchers
These types of vouchers are prepared when the cashier on behalf of the CTML is receiving cash. However,
these types of vouchers are small in quantity because majority of transactions are done by bank. On receipt of
cash, cashier prepared the cash received slip. Account officer prepares voucher on the basis of cash receipt
prepared by the cashier. In order to book the transaction the following entry is passed in the books.
Account code cash account (debit) Amount
Income A/C or receivable A/C (credit) Amount
Account code Bank A/C (debit) Amount
Cheques clearing A/C (credit) Amount
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ADJUSTMENT VOUCHER OR JOURNAL VOUCHERS
These types of vouchers are generally prepared in the following circumstances;
Purchase on credit
Writing off assets i.e. depreciation store consumption etc.
Rectification of mistakes or omissions
Now I discuss them one by one
Purchase on credit
Generally raw material, stores and spares are purchased on credit. In order to account them for the journal
voucher are prepared by the concerned account officer
Account code Purchase A/C (debit) Amount
Account payable A/C (credit) Amount
Copy of the invoices is attached with vouchers;
Writing off Assets
These journal vouchers are prepared in order to change the assets to expense for the preparation of monthly
accounts.
To account for depreciation of fixed assets:
Account code Depreciation A/C (debit) Amount
Accumulated depreciation A/C (credit) Amount
To account for the raw material consumption:
Account code raw material concerned A/C (debit) amount
Raw material store A/C (credit) amount
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To account for store consumption:
Account code store concerned A/C (debit) amount
Store and spares A/C (credit) amount
To account for store consumption:
Account code store concerned A/C (debit) amount
Store and spares A/C (cedit) amount
To account for accrued expenses:
Account code expense A/C (debit) amount
Account payable A/C (credit) amount
In additional to above referred kinds journal voucher is also passed to rectify the mistakes made in voucher
preparation or posting.
Marketing department
The main purpose of this department is to locate buyers through agents. So marketing starts from locating the
buyers, making contract, opening of LC, shipment and in last payment is received.
Learning as an Internee
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Duties
As I have told above that I had prepared vouchers of different types. Then I used to take vouchers of Mr. Tahir,
Miss Shazia and Mr. Ramzan to audit and brought back audited vouchers from the Audit. Copied cheques
whose payments were to be made on that day. Then I brought a few times Invoices for sales tax from marketing
department. Maintained record of filing with Mr. Farooqui. Then in Yarn Procurement I made worksheets for
the parties who do not have tax exemption certificate and their tax has to be deducted. Next in purchase
department, I had only worked for filing their GRNs and maintaining them in a serial manner. I have at tended
calls for a person not seat or else.
Accomplishments
As an Internee I have done all the works diligently which I have mentioned above. Instead I had done other
works as well which a person on the job never performs, like someone asks me to take vouchers from Audit like
I am his/her Assistant I had done that and never said no. As I have seen those employees which went to Audit
and the other asked to bring my vouchers as well and the person says no I have my own work you should better
go yourself. That is the thing which I wanted to share in this regard.
New Knowledge Acquired
One thing regarding new knowledge is what I have shared in Accomplishments. Next one important thing
regarding knowledge acquired is that what you are studying is not related to the job duties you are doing are in
future you have to do honestly. You have to understand that work from start, in case of an employee leaving a
company and joining other he also will have to understand the work in new company. I have got a lot of sense
regarding working in an organization where everyone is working out for cutting your roots. How to work in a
conservative environment! How to behave in any situation! How to negotiate with any person on job!
Problems Encountered
Well I dont have to face as many problems as I will have to face when I will go on job. First few days were
hard but I cannot say there was any problem. Employees there were very cooperative and they asked me to ask
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as many times about a thing till you are not cleared about that. They guided me on every issue and asked me
as/like a big brother to learn as much as you can. I am really thankful to all of them.
Impact of Experience on my Career
This experience definitely effects my career positively. As I would not have been come to know about the
atmosphere of any organization, this experience has told me a lot about environment of organization and
behavior of different type of people. All of this edge goes to my Institutes good understanding about students
future.
RECOMMENDATIONS
Colony Textile Mills Limited:
The first and most recommendation is to eliminate one man show prevailing in the company
There must be a proper system for training of employees and supervisors.
Importance should be given to employees turnover.
Different training courses should be arranged for the up lifting and improving the quality of work for
employees.
There is also a problem of work overload for the employees and i t should be control properly so that the
employees are motivated. As I have seen employees working till 8 PM. And I have come to know that
sometimes they work till 1 AM late night without any incentive.
Employees should be paid extra for the work which they do after working hours.
Annexure
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COLONY CEOs
Figure 1.1
COLONY Division wise
Figure 1.2
CEO
(CIL)
Technical Director
(Weaving)
Chief Technical Officer
(Spinning)
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Marketing Manager
Production Manager
Accounts Manager
Sales Manager
Production Manager
Accounts Manager
Finance Manager
Commercial Director
MIS Manager
Manager Personnel & Administration
Accounts Department
Figure 1.3
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Procedure of Yarn manufacturing
Figure 1.4
Annex 1.5
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PV PolyesterViscose
Mixed Different materials in Warp & Weft
Purchase Accounting System
PDN Purchase Demand Note
GRN Goods Receipt Note
SIN Store Issue Note
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SRN Store Return Note
UOM Unit Of Measure
HOD Head Of Department
HOL Head Office Lahore
G/L General Ledger
Item Code
Distinct
Code
Allocated
to an
Inventory
Item
Departmen
t Code
Distinct
Code
Allocated
to a
Departmen
t
Section Code Distinct Code Allocated to Section of a Department
Store Item Code List SICL
MIS Management Information Systems
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Bibliography
Sources from where I have collected data:
Miss Parveen Abida, 2004,Production Accounting & Management System, Inspection System,
Introduction,Internship Report on Colony Textile Mills Ltd. Lahore
Miss Javed Iffat, 2006, SWOT Analysis, PEST Analysis,Internship Report on Masood Textile Mills Ltd.
Faisalabad. Faisalabad
Mr. Bhatti Jamil Muhammad, 2006, Marketing Strategies,Internship Report on Nishat Textile Mills Ltd.
Lahore
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